When the controversial Maharlika Investment Fund was proposed and debated in Congress, the point was made that Filipino taxpayers do not have extra funds to potentially lose in a sovereign investment fund. But the BBM administration was insistent.
They presented the fund as a way of expanding the financial resources of the government given the tight fiscal space inherited from the Duterte administration.
According to Bilyonaryo, some of the investment decisions and proposals of the GSIS head have met stiff scrutiny at the board level. One example is the P1.4 billion worth of preferred shares of Alternergy Holdings that GSIS bought via a private placement. It is about half of the P3-billion equity capital raised by former Energy secretary Vince Perez for his new company. The GSIS GM unilaterally decided to invest because anything under P1.5 billion need not have the board’s approval.
That’s not as bad as a supposed proposal to bail out a Duterte crony from a bad investment in an ambitious property development project. After EDSA, politics also intruded in the investment decisions of the government managed pension funds. This resulted in the overpriced investment in Equitable-PCIB shares of stocks for which SSS lost P8 billion, according to a paper published in the Philippine Management Review by a UP professor of accounting.
CNBC reports that Deputy Prime Minister and Finance Minister Lawrence Wong commented: “What happened with FTX therefore has not only caused financial loss to Temasek but also reputational damage.” Because bringing power plants online from scratch takes at least five years, our current problems with low grid reserves resulting in yellow and red alerts can be blamed on a failure during the Duterte era. But the...
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